Letter Patent Appeal No. 476 of 1958. Case: State of Punjab Vs Model Woollen and Silk Mills and Anr.. High Court of Punjab (India)
| Case Number | Letter Patent Appeal No. 476 of 1958 |
| Judges | D. Falshaw, A.N. Grover and Harbans Singh, JJ. |
| Issue | Constitution of India - Article 226; Punjab District Boards Act, 1883 - Sections 30, 31(6) and 56(2); Milk Board Act, 1933 - Section 30; Punjab Tobacco Vend Fees Act, 1954; Punjab Excise Act; Punjab Sales Tax Act; District Board Act, 1922 - Section 174; Uttar Pradesh Panchayat Raj Act, 1947; Uttar Pradesh District Board Act, 1922; Uttar Pradesh... |
| Citation | AIR 1962 P&H 267, ILR 1962 (1) P&H 655 |
| Judgement Date | November 06, 1961 |
| Court | High Court of Punjab (India) |
Judgment:
A.N. Grover, J.
(1) By a petition under Article 226 of the Constitution the respondent challenged the validity of the levy of what was called a licence fee imposed under Section 31(6) of the Punjab District Boards Act, 1883, by means of a notification dated the 17th September 1954. This fee was payable by the owner for working, erecting or re-erecting or causing to be worked, erected or re-erected any engines other than an engine installed in a motor vehicle and was to come into force on 1st January 1955. The scale was to be as follows:--
Description of engine. Annual fee.
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Engines of 10 horse power or below Rs. 10/-.
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Engines of over 10 horse power to 20 horse power. Rs. 15/-.
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Engines of over 20 horse power to 30 horse power Rs. 20/-.
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Engines above 30 horse power. Rs. 30/-.
Mehar Singh J. held that the licence fee was a fax, which it was not within the competence of the State Government to impose under the entries in List II of the Seventh Schedule to the Constitution, and as under Section 30 of the Punjab District Boards Act the District Board could impose only that tax which the State Government was empowered to impose, the levy was illegal & ultra vires the powers of the District Board. The State of Punjab as also the District Board, Amritsar, who had been impleaded as respondents to the petition, filed an appeal under clause 10 or the Letters patent against the judgment of the learned Single Judge. That came up before a Bench consisting of Dulat and Capoor JJ. who considered that the matter was of importance as it involved determination of principles upon which a licence fee was to be distinguished from a tax and that it should be decided by a larger Bench. That is how the appeal has been placed before us for disposal.
(2) The facts are set out fully in the judgment of the learned Single Judge. All that need be mentioned is that in the mills of the respondent previously the machines and various sheds were connected through pulleys and shafts and were being driven by electric motors of high horse power fitted in each shed. There were three electric motors of 25 horse power in the weaving shed and one electric motor of 30 horse power in the finishing department. Later on, with a view to saving the electric energy, electric motors were installed for individual drives to each machine thus eliminating to a great extent the pulleys and the shafts system. For this purpose the respondent installed the electric motors in the following manner:--
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Weaving shed: 54 electric motors of 11/2 horse power each and 3 electric motors 10 horse power each.
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Finishing Department: 5 electric motors of 5 horse power each, 3 electric motors of 7 1/2. horse power each and 2 electric motors of 1 1/2 horse power each.
The net result was that instead of 3 electric motors of 25 horse power each and one electric motor of 30 horse power, 67 electric motors of small horse power, as mentioned above, came to be installed. By virtue of the aforesaid notification the respondent was called upon to pay comparatively a much larger amount of fee owing to the installation of 67 electric motors of smaller horse power than that he would have had to pay if he had allowed only 4 electric motors of high horse power to remain. In other words he would have been liable to pay Rs. 80/- per annum for the 4 high power engines with an aggregate of 105 horse power whereas now he would have to pay Rs. 670/.-annually for engines of 161 1/2 horse power.
(3) Certain regulations had been promulgated by means of a notification dated 17th September 1954 under sub-section (2) of Section 56 of the Punjab District Boards Act. According to these regulations, no person was to work, erect or reerect or cause to be worked, erected or re-erected an engine other than engines installed exclusively for irrigation purposes in any place within the area subject to the authority of the Board except under a licence granted in this behalf by the Secretary of the Board. On receiving an application for such purpose the Chairman was to get the facts stated in the application proclaimed by beat of drum in the abadi in which the engine was to be installed and any inhabitant of the abadi could submit an objection in writing within thirty days. After disposing of these objections a licence in from A appended to the regulations was to be granted to the owner of the engine on payment of a fee notified in the notification dated 17th September 1954. The licence was to be valid up to 31st March next after which it was to be renewable on payment of fee as aforesaid.
The licence issued under these regulations was subject to the condition that the licensee or his agent or workman was bound to permit the Board's Secretary, Engineer, Medical Officer or Health or any other person authorised in this behalf to inspect the premises at all reasonable time and without notice. He was also to make adequate arrangements for the extinction of any outbreak of fire and for keeping the premises in a clean and sanitary condition providing adequate ventilation, suitable drains, urinals etc. for the workmen employed. He was not to permit any such work which gave rise to offensive noises without the special authority of the Board and to affix a silencer in the exhaust pipe in such a way as to prevent the emission of any disagreeable sound. There were other conditions also, which need not be mentioned, which were meant to avoid any nuisance by discharge of offensive waste products or emission of gases by the engine during the process of working. The licence could be suspended or revoked by order of the Chairman of the Board on breach of any of the conditions and anyone committing the breach of the regulation could on conviction by a Magistrate be punished with a fine which could extend to Rs. 50/- and in case of continuing breach with a further fine which could extend to Rs. 5/- for every day during which the breach continued. These regulations were to come into force with effect from 1st January 1958.
In the return, which was filed by the present appellants to the petition under Article 226, the position taken up was that the fee, which was being levied by the impugned notifications was a licence fee only and had been levied for allowing the respondent the privilege of running the engine with the object of reimbursing the District Board for the services it rendered by taking measures for promoting the health, comfort, convenience and interest of the public and the industrial prosperity of the inhabitants residing in the area of the District Board including the respondent. It was further stated that
the District Board provides many amenities to the mill and its employees. The children of employees and their families are vaccinated by the District Board staff and derive help from Veterinary dispensaries in the District. The children of the employees are also reading in the District Board School.
It was also said that the income realised from the fee was utilised in administering measures for preventing nuisances affecting the health of the people. The total income from the licence fee to the District Board for one year was stated to be Rs. 4,355/- only. Although no separate staff was being maintained for the administration of the provisions relating to electric motors, it was maintained that the staff of the District Board, which was being paid from the aforesaid income as also from other income of the Board, had been employed for the purpose.
(4) The learned Single Judge found that there was no...
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